Nifty to gain bullish strength above 17414 pts

With the positive global market, NSE Nifty opened with a gap and sustained till the end. It closed with 246.85 points or 1.46 per cent gain at 17200.80. The Nifty Realty, Auto, and Energy were the top gainers with 2.65 - 3.57 per cent gains. Most of the sector indices ended up by 0.7 to 2 per cent. The market breadth is positive as 1258 advances and 824 declines. About 60 stocks hit a new 52-week high, and 113 stocks traded in the upper circuit. Adani ports, Reliance and Ruchi Soya, were the top trading counters today.

All the thematic and sector indices closed in positive territory after a volatile session. The benchmark index also closed between the 50 and 200DMAs. The Nifty opened with a positive gap and sustained the opening gains, but it experienced volatility. A sudden surge of about a hundred points in the last 30 minutes surprised the traders. As it opened with a gap up, yesterday's candle has turned into an evening star. At the same time, it formed a higher bottom. The RSI also developed a higher low. In any case, if the RSI closes above 51.5, the bullish reversal will get a confirmation. There have been a series of gap openings in the last two weeks. It is difficult to take positional trading decisions.

Today's candle body is stuck between 50 and 200DMAs, and either closed will have a directional impact. As it is in a neutral zone, the Nifty needs to close above the 17414 or above the 20DMA to get the bullish strength. The erratic behaviour in price action is also a worry point now. As the monthly expiry is just two days, the volatility will increase further. The rollovers were improved, but still below the previous month. Interestingly the Nifty futures volume declined to below average in the March series. The current week's close is important for the directional bias.

(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)